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- Appen (APX) reports half-year results and plans to buy location data provider Quadrant for US$25 million (around A$34 million)
- As expected, the company saw its first half impacted by its global technology customers focusing on new artificial intelligence products and applications
- Group revenue for the first half was $196.6 million, two per cent lower than this time last year and Appen is expecting to pay a 4.5 cent dividend to shareholders
- The purchase of Quadrant will expand its data capabilities and product offerings
- Appen is trading down at 12.9 per cent at $12.04 per share at 10:38 am AEST
Data developers for machine learning and artificial intelligence (AI) Appen (APX) has reported its half-year results and is looking to buy Quadrant for US$25 million.
As expected, the company saw its first half impacted by its global technology customers focusing on new artificial intelligence products and applications.
Appen collects and labels images, text, speech, audio, video and other data used to build and improve artificial intelligence systems.
Group revenue for the first half was $196.6 million, two per cent lower than this time last year. However group product revenue was up 15.2 per cent to $22.3 million.
For shareholders, the board has determined an interim dividend of 4.5 cents per share, 50 per cent franked, flat on the 2020 interim dividend.
New market revenue was up 31.5 per cent, due to product-led growth and strong performance in its China and enterprise businesses.
CEO Mark Brayan said it was expected that global technology customers would focus on new AI products as those customers broadened their revenue base outside digital advertising and responded to data privacy changes.
“This resulted in lower ad-related services revenue, but higher product revenue as global customers used our market-leading annotation platform and tools for new AI use cases,” Mr Brayan explained.
“We expect these new programs to grow and augment our ad-related programs
as our Global customers rely on our expertise and product capabilities to help
them develop the breakthrough AI-driven products of the future.”
At the end of the period, Appen had no debt and a cash balance of $66 million.
Quadrant purchase
Additionally, Appen has agreed to buy Quadrant, a global leader in mobile location and point-of-interest (POI) data.
The purchase will expand Appen’s data capabilities and product offering, as well as opening new growth opportunties.
To buy Quadrant, Appen will make an upfront cash payment of US$25 million (around A$34 million) and a potential additional payment of US$20 million (approximately A$27 million) in shares upon receiving revenue milestones in 2022 and 2023.
“The acquisition of Quadrant enables Appen to increase our addressable market and to expand our product and service offering to our customers to include more mobile location and POI data capabilities,” Mr Brayan said.
The global location intelligence market was valued at US$11.9 billion (approximately A$273 billion) in 2020.
Appen was trading down at 12.9 per cent at $12.04 per share at 10:38 am AEST.
